Hello and welcome back to class. Our focus today, the business case for renewable energy. First we'll start with budgets. Renewable energy can often create 20 year predictability in power prices that also escalate at lower annual rates than conventional power. This arrangement is typically created through what's called a power purchase agreement, a PPA, and can extend even 25 years at times. In there, it is a term often states the annual percentage at which the power will increase, and typically the target is to be a lower percentage than what the grid, power grid delivered electricity would likely escalate at, over that same 20 or 25 year period. And that's hard to predict of course. You can look backwards. Of course you know looking back does not guarantee what's going to happen, looking forward but the idea is that your savings in PPA contracts like this can actually increase over time, given that... that change rather, difference in an annual escalation. What are you looking at in the graph is just a highlight from US electric generating capacity additions in 2016 and to highlight the growth in the yellow which is solar and the wind which is green. Only to note that again, renewables are are not a niche and this is, this growth is happening for business reasons largely. Resilience is another reason that renewable energy is growing. Many organizations, let's say hospitals, financial institutions, data centers and many homeowners do not want to ever go without power. You can certainly understand that. One example where this was made very real was Hurricane Sandy in 2012. In the US, It was the second most costly storm at $71 billion of damage and 6 million people were still without power two days later, often in in large cities. To add to this, human induced climate change is likely, according to scientists to increase the frequency and severity of storm events. Hence this motivation could become a larger driver of renewable energy. Saving money for sure is a goal. 76% of companies surveyed by PricewaterhouseCoopers see renewable energy purchases as a way to generate an attractive return on investment or ROI. Other motivations according to the same survey suggested that 85% are seeking to reduce greenhouse gas emissions and about 50-60% are seeking to limit energy price variability as we discussed in the first slide. Google has come out to say that their target for 2017 is to be 100% powered by renewable energy, saying that "we are the largest corporate purchaser of renewable energy in the world. It's good for the economy, good for business, and good for our shareholders." Again many many business reasons they are pursuing this. Next, brand. So Google, Google just reference that. Here a statistic, 70% of big corporations are actively pursuing renewable energy purchases. An example of this is the Business Renewables Center organized by the Rocky Mountain Institute. And their goal is to have corporations like some of those highlighted here on the slide to procure 60 gigawatts of renewable energy by 2030. Again, making it easier for these organizations across many many of their many locations in their portfolios to reduce the friction in purchasing renewable energy and receive many of the benefits described in these slides. Attracting and retaining talent. Here's some research from Bain and Company. Roughly 60% of employees care about whether their employers take action on environmental and social sustainability issues. No doubt, how a company powers itself and the negative or positive impacts of that type of power generation are up there near the top of the list for items in sustainability, more broadly said, that employees increasingly care about. Lowering cost of grid power. This certainly is happening all over the world. If you look at some of the research from Lazard in their Levelized Cost of Electricity studies you'll see that unsubsidized cost of large solar and large wind is increasingly the cheapest form of new power generation in many countries around the world. Here I'm highlighting a particularly acute opportunity for renewables to lower the cost of power coming from the mainstream grid and that is islands - island nations in particular. Here a focus on Cabo Verde, a location where we have family, and so it's near and dear to our hearts for sure. They have a goal of 100% renewable power by 2020. And part of the reason is that renewables can offer cheaper power than the current baseload power provided by diesel combustion. Key conclusions, let's start at the top here. Renewable energy is not just for environmentalists. It's growing because more and more businesses love it. They see the benefits from it. Second, renewable energy benefits are both tangible, such as reduced power costs and also intangible, such as building company brands. As you make your business case for a new product or service or project in your entrepreneurial pursuits, be aware which type of benefits resonate most with your audience, whether it's those that are tangible or those that are intangible. My guess is, it's the former not the latter. But I would say do your best to make sure that the latter are not treated as zero benefit. Finally, real energy does not make financial sense everywhere yet, I think it will. Barriers include low power prices, low interest in environmental goals and lack of clean energy goals specifically. All those by the way are also changing. Finally questions for you. So as usual, I strongly encourage you to get out the pen and paper and write down answers to these questions. The first, which big brand companies, such as Google, will you study and cite when making the business case for renewable energy? So this is kind of trust by association, right? If the person in the audience, your stakeholders, do not trust you for some reason, they may more likely trust a big brand name like Google, who is deeming that renewable energy, to have a strong business case. Second, which renewable energy benefit matters most or least to your future employees, partners and customers? Again, this can be a driver for attracting, retaining the best talent to do the most with your company. Finally, which type of renewable energy will you focus on in your entrepreneurial pursuits - solar, wind, biomass, waste energy or other? And for what business reasons will you choose to focus on that sector? Now this will sort of require a little more research, but luckily I provided you with great readings in this module to help you go deeper into the weeds and if you want more, for sure you can look at the the bibliography, the resources cited in those readings as one next set of places to go to do more research. Great. Well with that, we'll see you in the next video.
